The first meeting of the Minimum Wage Commission 2022 took place this week and on the agenda was a review of financial information from the Central Bank of Nicaragua (BCN) and other information from the Ministry of Labor (MITRAB).
The Minimum Wage Commission represents the three interest parties in the negotiation.
- The Government, through the Ministry of Labor.
- The Employers, on this occasion represented by the Association for the Promotion of Development and Sustainability of Nicaragua (APRODESNI by its acronym in Spanish).
- The Workers (represented by Central Trade Unions or “Centrales Sindicales”
The deadline for producing a consensus is February 28th 2022. Failing a consensus, the government, through the Ministry of Labor, will decide the minimum wage.
The average of 10 categories of minimum wage has been frozen at 6,518.24 Córdobas since March 1st of 2021. (The lowest being Agricultural Workers with 4,414 Córdobas and the highest being Construction, Financial and Insurance with 9,880 Córdobas)
As this was the first Minimum Wage Commission 2022 meeting, none of the triparty members have made a proposal for an increase in the minimum wage; however, there have been various comments reported in the press regarding the position of the employer representatives and the unions.
See previous Nica-Biz article from January 5th 2022; Minimum Wage Review 2022 – Unions want Double Figure Increase.
APRODESNI (Employers) are already talking about a 4% increase yet are still analyzing information.
The employers group also acknowledged that there should be a discussion on Income Tax (IR) and the current annual income ceiling of 100,000 Córdobas (8,333 Córdobas per month) when income tax kicks in.
One category (Construction, Financial and Insurance) is already over that monthly amount and two others (Mines and Quarries as well as Zona Francas) are getting close or could also be over depending on the production bonuses in place.
There was talk last year of increasing that personal tax ceiling to 120,000 Córdobas per year.
For the Trade Unions, they are still pushing for a double digit increase. They base that on an adjustment required to recover wage increases lost over recent years as well as inflation, the annual devaluation of the Cordoba and the “Basic Basket” (the Canasta Básica, a fixed list of 53 products and services used to track how inflation affects the monthly basic living expenses) and the annual devaluation of the Cordoba.
